Amidst the exciting events happening in the cryptosphere, with social media darlings like DOGE and XRP taking centre stage with skyrocketing gains, but in the same way, filled with scary retracements, one particular old school crypto has been making great gains despite not being on the radar of many crypto influencers. That coin is Litecoin (LTC).
LTC has been making steady gains without much fanfare and this could be the very reason why it is a good addition to any investor’s portfolio. It provides stability and perhaps a certain level-headedness in what is now a very hyped-up market.
LTC has quietly gained 35% against the USD last week, and its gains are even more pronounced when compared against BTC. It gained 50% against BTC last week and while at it, smashed a one year high against BTC. The LTC/BTC pair could be a very good pairing to trade now that price has broken out from a long consolidation.
However, the most exciting chart is the LTC/USD one, which has just broken its ATH of $375 to hit $400. LTC is trading nicely in a rising channel with a possible price object of $800 in the coming weeks, however, it may rest a while after passing $400 for a few days before continuing its ascent.
On-chain data seems to also suggest a bullish time ahead for LTC, as a dramatic spike in the number of active LTC addresses have been observed since the beginning of 2021, signaling a rising demand for LTC as BTC shows signs of cooling off. In fact, the number of active address growth is rising faster than its price, indicating that there is room for price to play catch up.
The Rise of DOGE Beneficial for LTC
The ability to merge mine DOGE is also an attractive aspect that is driving demand for LTC. DOGE’s rise in price has created awareness in LTC, with the ability to mine DOGE when mining LTC an attractive proposition. As the number of miners in LTC grow, active address count is expected to continue growing, which will then set in a greater network effect and a rising hash rate, which means the LTC network can only get healthier. From a price perspective, a rising hash rate inevitably drives the price higher.
Other than supporting the network, the DOGE effect benefits LTC in another way – paying tribute. DOGE traders who made huge gains from speculating in DOGE may use their winnings to buy LTC as a tribute to DOGE, since DOGE is derived from a fork of LTC. The price increase of LTC has been observed to lag that of DOGE so far this year. Every time after a big surge in DOGE price, LTC price moves up. Maybe traders who can’t bring themselves to trade DOGE may consider using this observation to trade LTC?
As altseason rolls on and both BTC and ETH have gone ahead to chart way higher ATHs, LTC, which has often been a laggard, may embark on an explosive rally anytime now. With similar consensus mechanism and token economics as BTC (the only big difference being that LTC has a total supply of 84 million against BTC’s 21 million), there is no reason why investors will favor BTC and not LTC.
Teetering on the brink of leaving the crypto top 10, it is time the token formerly placed at number 3 on the crypto top 10 gain some ground and show the world its prowess as “The Silver to BTC’s Gold”.
About Kim Chua, PrimeXBT Market Analyst:
Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.